Google's Own Private Internet

Google (Nasdaq: GOOG) is building a network so massive that several service provider specialists believe it could end up with one of the world's largest core transport networks, effectively building its own private Internet.

Light Reading, which has previously reported on Google's telecom aspirations, has learned that Google is well underway at putting the pieces together (see Headcount: Great Googly Moogly!, Google Backs Powerline Carrier, and Google Talks the Talk). It is accumulating hundreds of thousands of square feet of carrier hotel space that could host giant server farms, buying up fiber, and issuing large RFPs for DWDM and Ethernet-based telecom equipment that could total in the hundreds of millions of dollars, according to multiple sources at carriers and equipment vendors.

By building a core of transport techologies and peering directly to the world's leading incumbent telcos and PTTs, Google could end up securing and controlling distribution of much of the world's Internet traffic, say the sources. Its massive server farms would have a direct link to the backbone.

Google did not return phone calls for this article. In the past, when asked about its telecom networks, the company has declined comment.

One indication of the size of the product is Google’s recent real estate activities. Crains New York Business reported yesterday that Google acquired the rights to 270,000 square feet of space at 111 8th avenue in Manhattan, which is a large telecom interconnection facility. That space is expected to be populated with telecom equipment and server farms running Google's search and other applications such as GoogleTalk (see Google Talks the Talk).

Another service provider operator, speaking under condition of anonymity, says Google's got big plans on the West Coast, where it is negotiating for large amounts of carrier hotel space and hopes to connect to Asia through the largest fiber peering points.

”I could tell you more but they would kill me,” says the interconnection specialist.

Why does Google want to do this? One idea is simply to reduce its telecom costs and peering fees, which many believe are significant. Another idea is that by building its own core network and focusing on Layer 1 and Layer 2, Google could control the distribution and security of much of the content and traffic distributed over the Internet. In a sense, it would be a higher-performance Internet, such as the research network, Internet2.

”My understanding is they want to do remote peering and transit bypass,” says Bill St. Arnaud, senior director of advanced networks at Canarie Inc., who has heard scuttlebutt about the Google network. “By building their own distribution network they don’t have to pay peering costs. Remote peering and transit costs are significant for all the big Internet players. So everybody is thinking of doing this.”

Naturally, equipment provider mouths are watering over the project. Several sources tell Light Reading that Google has issued a DWDM RFP that could be one of the largest Tier 1 service provider contracts, with the total value expected to be in the $100 million ballpark. , sources say, is particularly excited about bidding on the RFP, given its recent victory in similar DWDM networks at and , says one source. Others believed to be in the bidding include Ciena Corp. (Nasdaq: CIEN), , , and Huawei Technologies Co. Ltd.

Because Google is acquiring its own fiber and building Layer 1 and Layer 2 equipment at global interconnection facilities, it can create its peering points at large interconnection facilities, sources say. This would allow it to peer with global PTTs and keep much of its own traffic in a private Layer 2 network, securing and speeding up the performance of much of its traffic.

”This could create a shift in where public IP interconnects,” speculates Newby. “Traditionally, people went to Internet peering points. But because Google is so large, it could be the Internet. People would go there and never leave.”

re: Google's Own Private Internet I don't really understand the technical issues here, so please be gentle if this is a stupid question...

If Google have their own network will they be able to tell me that if I searchh through them and therefore get connected to a third party site through Google (and their network) that they can offer (at least imply) that I will be able to download this content faster than if I went through Yahoo, MSN etc? If so, they will grab an even larger share of the search/portal business and charge still higher for advertising.

Could it be that they will use a combination of massive storage/search technology/backbone capacity to become the source of choice for multimedia content? Sign up with Sony etc. host their content, deliver to consumers, take their cut and then sell information to Sony on what someone watching Spiderman does with the rest of their life.

It may be just be possible that Larry Page and Sergey Brin are sitting in a secret hideaway under a volcano petting a very white cat (one each of course)!

Now if you had a wad of cash, and you wanted to eat somebody else's lunch, would you go after your supplier's or your customer's lunch?

And vertical integration offers other benefits. Scott mentioned other services, which I think is obvious. I think there are less obvious ones as well.

The obvious downside is that you are now managing a business that is very different from the one you started in. Success in one business does not always translate to success in a different business. (For example, investors regularly bring in "experienced" people who have no knowledge a new company's domain, and for some reason haven't coupled the traditional 1/10 success rate to this behavior. But I digress.)

Google famously built its own data center by stringing together thousands of cheapo Dell PCs with Gigabit Ethernet. It did all the software internally. This approach was used rather than by purchasing high-end proprietary solutions hawked by vendors such as H-P, Sun, and IBM, which were in fashion at the time.

Google's now doing the same thing in telecom. It's using cheap standard technologies such as DWDM and Ethernet to drive costs down and get "bang for the buck." Rather than buying an expensive "solution" from a service provider (hmmm, let's see, pseudowire Ethernet over Frame Relay over ATM over Sonet?), its going it alone with dark fiber, DWDM, and Ethernet.

I suspect that's where the bulk of the the world's telecom networks are going.

As for Google's applications, well, they will be more powerful if they can be kept on the network. Imagine how good the VOIP call will be if Google has control of the network and can connect your VOIP call directly from the NYC POP to the Hong Kong POP.

re: Google's Own Private Internet The obvious downside is that you are now managing a business that is very different from the one you started in. Success in one business does not always translate to success in a different business. (For example, investors regularly bring in "experienced" people who have no knowledge a new company's domain, and for some reason haven't coupled the traditional 1/10 success rate to this behavior. But I digress.)

A new guy just started working for them who has a fairly reasonable amount of networking experience - Vint Cerf.

I see the primary suppliers to Google as those that produce the "free" content (which is in turn indexed as a "free" web service.) I wonder if this "free" model will work for video. Video is expensive to produce, hence suppliers will require payments, and it's very difficult to index. Also there remains the access network challenge where little can be found for "free."

re: Google's Own Private Internet Maybe I don't know enough about peering and transit costs (I don't work for a Service Provider), but doesn't this turn some of their peering costs into income generation?

If they have a huge inflows of data, then then are generating income from other service providers, to counteract the huge cost of outflows. On the other hand, peering costs are much higher (pay for the size of the pipe, not the data transferred) and they do not make any money off incoming data. Consequently, creating a transit network might significantly improve their bottom line.

Additionally, as the number of applications increases, the balance of data flow might become more even. If the incoming data volume increases relatively to the outgoing data volume, then their bottom line will continue to improve.

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